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Breakingviews: Big Beer's heady challenge

Antony Currie and Rob Cox discuss how craft brewers are chugging down bigger gulps of Americans' spending on their suds – and how big companies like AB InBev are responding.

TRANSCRIPT +

There's a challenge and opportunity for big bad up in the state of the month averaging and it's. Rob Cox is of economics at China behind. Some heady talk of beta it's become as famous yeah I was up there just for you know. Recreational purposes cold and that. Friends said pick up some hidden properly well OK I'll get some it's an upgrade beer it's a double IP papers produced by these guys acumen too is. Need to step Vermont I still croft for anything yet they may get double life PA of any Topper comes in sixteen ounce cans of pop that by their wants and it in the past but. And there's this huge like everyone's asking for now I go up there it's impossible to find. And then I find out more than there's there's like a black market in the beer and I need three he'd they sell it ten bucks the retailers. The retailer recently had a report on scholarship for packers' sixteen app so it just got me thinking looking at the economics of the beer business the United States quite interesting so. Basically. Dear beer consumption is flat and a million barrels in the United States and has been in many years a lot of that that stuff you know. But how's that Miller but that kind of thing but these guys to craft brewers who you know and love you know. Are actually getting huge chunk of the market or indeed gaining an ever greater piece of the market is that it with single event the revenue. Rice going up even knows the number of this so well also last volume okayed. And consumption they're getting a bigger chunk of that by him psych it'll be 11% this year according to the up from the Steelers associates and yet exactly. For the brewers association which is like a trade group for craft very. You know I obviously located in Boulder, Colorado. But they episode they're getting 11% this year of the of the volume share but they're gonna get about 17%. Of the dollar volley and I said to the point is they're getting more valuable piece of the market right and that did that a lot of people are talking about how far can it go right that's sort of the question yeah and live there the comparison I'm making a column is too this. Special mobile coffee business. Specialty coffees forty years ago we were African Folgers and Maxwell house. And now all that other stuff that don't get stuff off of but. Today. Especially copies like Starbucks coffee some things you find storage costs you like 1213 dollars per pound yeah those guys have now that 37% of volume. 50% of the dollars right by so so the point is if you can get to that point that's quite a threat to the likes of Budweiser. Avian vet highly kin which Costco always infrastructure it's a much bigger than the community decreasing share at the right of the dollar I don't know why. So so that's so it's sort of outing to outing by so yet two weeks ago. AB InBev. The wound bought something and band organ it's a small 40000. Barrels a year it's really quite small. Called ten barrels brewing they add that to a bunch of others they bought so it's that this is he's starting to see them do that and then they can put him out of the big. You know the trucks that go out to its from the distributors to that the retailers. And you're gonna see a lot more of that but at the same time. Because they're getting in the craft brewing business. You have more entrants so Lester they're 300 new bird's nest it's not some of them might be. You know pubs that Bruce and beer on the side that microbreweries but then it but people like the guys at any topic alchemist action brewing company. They represented in that sense. The threat but off the opportunity right here this spot rob thanks talking us through them next time future on pick up some different look. I'm will be back with more britney's tomorrow.

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